Bush urged to save trade deal

United States manufacturers have called on the Bush Administration to ride over the country's powerful agricultural lobby and sign up to a comprehensive free trade agreement with Australia despite the farmers' opposition.

Another day of marathon negotiations in Washington between Trade Minister Mark Vaile and US Trade Representative Robert Zoellick ended with no official comment from either side. With at most three days left to reach agreement, the talks face an uphill climb due to US refusal to open its markets to Australian farm exports.

Industry sources said the negotiators have clinched a conditional deal to reform Australia's pharmaceutical benefits scheme allowing more transparency in assessing medicines for inclusion in the PBS.

But the reforms would take effect only if the two countries conclude a free trade agreement, which would require President George Bush to reverse his decision to offer Australia minimal market openings in agriculture.

Jerry Jasinowski, president of the US Manufacturers Association, said an agreement with Australia "promises to be the best free-trade pact ever entered into by the United States if we can get a comprehensive agreement covering all sectors".

His support came after Australian trade negotiators reportedly agreed to eliminate most Australian tariffs on US manufactured goods. Australian negotiators have tried to wrap up agreements on all non-agricultural issues to put maximum pressure on the White House to change its mind on Australian access to US sugar, dairy and beef markets.

Australian opponents of the deal challenged the Government to keep its promises that it would not trade off the PBS, local content rules on television and its insistence that disputes between investors and governments be handled in the courts.

"The danger is that the minister will cobble together any deal to save face," said Pat Ranald, convenor of the Australian Fair Trade and Investment Network. "Because of the secrecy of the negotiations, nasty trade-offs could be hidden in the details, and we will not see the full agreement until after the deal is done."

The US manufacturers attacked the sugar and dairy industries for lobbying against the agreement.

"It's time to stop listening to small, but very vocal special interests and focus on the overall benefit to the US economy," Mr Jasinowski said.

His comments were backed by an editorial in yesterday's Wall Street Journal which accused the US sugar lobby of trying to sabotage the US-Australian FTA, saying the industry had a "long history of damaging the US economy for its own enrichment".

A long list of Republican and Democratic politicians are lobbying hard for sugar and dairy farmers in states that are critical to Mr Bush's re-election.

Mr Vaile now has less than 72 hours left in Washington before his US counterpart is due to go overseas. Officials believe unless the deal can be wrapped up this week there is little chance of it going ahead before the US elections.